Choose or Lose

The founders calculated they'd need to reap about 20% to 30% more business from some two dozen companies to help make up for the roughly 100 customers they planned to "let go" within two years.

Anxiety levels rose. For one thing, could CRI replace bad sales with good fast enough? Pope and Corson believed that their biggest customers "could be even bigger yet" if the sales staff were freed up to focus on those accounts. "But," recalls Pope, "believing in your head is one thing; your heart's another."

And there was a thornier issue: no one wanted to be the one to tell a current or potential customer "Sorry, we can't do that." Account managers were quick to make a case for why this or that customer should be excluded from the new guidelines. "It was greatly uncomfortable to let go of those [marginal] clients," recalls Samantha Ball, who was new in sales at the time. Jo??n Palmquist, a longtime account manager, explains the ambivalence that prevailed: "When your job is to bring in new business, you don't want restrictions on what new business you can bring in."

But little by little, CRI began enforcing its new standards with existing customers. Small groups of employees rehearsed what they'd say to an old customer who called with one of those once-in-a-blue-moon projects. Everyone knew CRI made little or no money on those sporadic contacts. Senior vice-president Ginger Sack remembers how one General Mills employee routinely called once a year, at Christmastime. "I had to turn him down," she says.

Paring down the customer list was most difficult on salespeople who had little experience dealing with major customers. But it was hard on everyone. "It was scary on the front line," recalls Sack, who notes that everyone was thinking, "What if my three clients don't pan out?"

More important, what if big customers rejected CRI's bid to get closer? But to hear customers tell it, they didn't mind the extra attention. "I noticed a stronger relationship, and that there were more CRI people deployed at us. It was impressive," says Robert Smith, who was then a director of marketing research at Dow Brands and is now at Maytag Corp.

Such glowing customer reviews began to translate into increased sales and profits in 1989. By 1992, CRI had successfully overhauled its system, and there was an impressive leap in sales, to $16 million--up 45% over 1987's figure.

Over time, even the salespeople were relieved. Instead of beating the bushes, they were able to focus on--and be compensated for--how well they developed the customers CRI had already carefully screened.

The gatekeeper
Forty-six-year-old Beth Rounds doesn't look particularly powerful. A petite, neatly groomed redhead, Rounds speaks softly and smiles easily. She works in a modest office near the front doors of CRI's Minneapolis headquarters. But Rounds plays one of the most important roles in the company: screening new customer leads and rejecting those that she thinks fall short of CRI's profitability goals. She is the gatekeeper.

Anxious would-be customers have to pass Rounds's entrance exam (see "Screening Prospects: Six Questions," below) to learn whether CRI will consider taking them on. Her questions are simple, but Rounds is no pushover. She estimates that she rejects roughly 90% of all potential customers' queries that come in over the transom.

Michael Henderson, a senior marketing-research analyst at American Century Investments, a mutual-fund company based in Kansas City, Mo., was slightly taken aback by that approach when he first called CRI last summer on the recommendation of a colleague. "There was a very candid emphasis on taking on larger business," he recalls. "Many vendors are happy to take on any business."

Rounds, a 20-year veteran of CRI, was appointed to her current position in 1996, after playing an unofficial gatekeeping role--along with Corson, Pope, and others--for several years. When a new query comes in, Rounds tries to get crucial information from the prospect right away. It's a delicate balancing act, one that requires both diplomacy and reporting skills. "I'm trying to get five to six key questions answered," she explains. "I ballpark the budget for a project and ask if that sounds right. I'll hear, 'Yes, that sounds right,' or, gulp, 'That's our yearly budget!' In the end I know what the customer's story is and if they're buying what we're selling.

"When I explain CRI and how we do things, many take themselves out of the running," Rounds continues. "That makes it easy to make referrals." She maintains a short list of respected (indirect) competitors to whom she can refer rejected prospects, making her a de facto "help desk" for the industry. Rounds estimates that of the 20 to 30 such callers she talks with a month, only 2 or 3 are bona fide leads. A few dejected callers respond with the question "What's the matter--don't you need business?" Rounds reports. "But 99% understand what we're trying to do."

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